No stone unturned

No stone unturned

With the passing of recession the North East’s construction industry is going to be very different. Jeff Alexander in his new additional regional role tells Brian Nicholls how.

Just as burdens of recession rose from his shoulders, a heavy chain of responsibility has alighted on them instead. Jeff Alexander, as newly elected president of the Northern Counties Builders Federation, now becomes a key figure in driving the construction industry’s recovery.

He doesn’t wear the president’s financially and emotionally valuable chain of office to lunch with BQ of course. But he does enthusiastically bring along two major aspirations for his two years of office under way. As a director also of Surgo, a prosperous family firm expecting to raise turnover by 50% this year, he’s well placed to express confidence about prospects on both counts.   

However, with two more company collapses recently announced elsewhere in the country, and inevitably wider fallout, Alexander confirms that some contractors are still challenged by cash and credit problems and access to finance, even though activity has increased over a year.

“It seems to go in waves with people seemingly keen to get the work, and margins therefore tighten again,” he explains. His own Newcastle based company, which has thriven throughout, won work plentifully before Christmas at a price it felt fair. But the market has hardened a little once more.

“There’s still a lack of big contracts. So some larger contractors are still swimming in the same pool as smaller ones. Until bigger jobs come back there’ll probably be too much competition in the market place still.”

Big education contracts, in which Surgo has excelled, are less plentiful. But it had safely beforehand moved towards alternative markets, though it has just finished building a new sports centre and swimming pool for Royal Grammar School in Newcastle.

Opportunities to diversify have improved, largely because the private sector is starting to recover a little. With all the big cuts in public funding, public projects are expected to remain scarce.

Delays between awarding tenders then giving go-ahead have also dragged at turnovers, and whereas some recent awards have indicated how firms may get into the habit of chasing turnover he reckons that’s really not the way to go. “Maintaining profit and a strong financial position is paramount,” he counters. “If at the expense of that your turnover goes down, you have to be prepared to accept that.

“We’ve done that at Surgo. It doesn’t pay to chase unprofitable work for the sake of turnover. A lot of the failures you read about have been due to people thinking ‘we need to keep our turnover up.’ They’ve been buying work at a loss. Our turnover dropped during the recession but we let that happen. This year it will increase by about 50% - from just over £20m to £30m.”

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Amid ongoing volatility, then, Alexander presses ahead with his federation ambitions: to intensify the encouragement of training and recruitment into the industry generally, and to band with other representative bodies of construction in the North East to raise a unified regional voice towards national and local government on behalf of SMEs in the sector’s broadest sense.

“The federation’s core aim has always been to encourage training and entry into the industry,” he explains. “Hopefully we’ll increase the level of support we give worthy causes in respect of training and development of construction careers - at university, college, school and company level.

“The organisation has likewise always strongly encouraged direct employment and recruiting of apprentices and trainees. Apprentices are lifeblood to the industry. Progressing their careers has always been a strength to the independent regional contractor. Our larger competitors these days, generally speaking, sub-contract everything. So we’ve always been big supporters of the local company keen to improve its workforce, grow from within and keep and develop those people.

“I’d like to think during my term we can reach out to more organisations to improve scope we can offer for making training grants available, for increasing involvement in the industry, encouraging better quality of intake - and encouraging schools and colleges to consider helping careers in construction to move forward.

“More apprentices are being taken - definitely. Talking to contractors in our organisation and to people I know through the North East Chamber of Commerce, I gather the training effort is definitely being raised. Colleges say their take-up is improving again after a poor period, and I think if the NCBF can encourage clients to consider local contractors more widely than before – I’m talking about the public sector here – that will further our training aims generally.”

The image problem in recruitment which the industry had suffered has dramatically changed for the better over the past few years, in his view. “A lot of organisations, such as Considerate Constructors, are looking positively to promote it,” he says.

“A number of technical roles have become more graduate orientated, and I’ve mixed views about that,” adds Alexander, a graduate himself. “I still believe site managers and supervisors who’ve come from a trade background in parallel with their educational qualifications are a very, very valuable way to move forward.”

Surgo goes for a mixture. “We have graduates we’ve trained to be middle managers and managers, but we’ve also promoted from within, raising former tradesmen through the ranks, encouraging them to get formal qualifications. I think it has to be a mixture of the two.”

Greater effort is needed to attract more women into construction too. It’s already working among architects and, to a lesser extent, engineers in Alexander’s view. “Women in Construction, with which the NCBF always welcomes involvement, has done some great things,” he believes.

The NCBF also sponsors in the region’s Construction Excellence awards the Young Achiever prize, won this year by a woman, Jenna Graham of Darlington, who reached 6,000 other young people in a recruitment campaign. But, Alexander admits, “I’m still disappointed in the trades take-up by girls in careers like plumbing, bricklaying and joinery, though colleges tell me that’s improving.

“Yes, working on a building site is sometimes cold and uncomfortable. But so is working in
the like of agriculture and forestry. For us rewards need to be stressed. Ours is such a worthwhile industry. You produce an end product and can take pride in having helped to create a tangible asset.”

Growing prefabrication and other technological advances are actually removing a lot of discomfort, and onsite conditions and welfare are much better. “Regardless of one accident being still an accident too many, safety on sites has improved tremendously. It’s a much more comfortable environment too – with everything achieved during the past decade,” he suggests.

The industry’s raising its game with green roof building, self-healing concrete, timber frame construction, use of recycled materials, energy efficiency priorities and the prefabricated
building offsite.

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During the last boom around 1997, when intensive building of schools was under way, skilled onsite labour was scarce, and lots more prefabrication was done, using panelised systems. Now there’s a bricklayer shortage.

“I think people are looking more towards prefabrication again,” he says. “Though it
still has far to go it’s already a much more efficient process.”

As for timber frame, Alexander is a big advocate, having worked with it for 25 years during which the systems have already improved immensely, especially in offering greater heating and other energy efficiencies plus faster construction. While prices can still vary, they’re presently much on a level with traditional build. Surgo has built two Newcastle hotels around timber frame.

Alexander has recently been involved with anaerobic digestion through Surgo’s win of a £12m contract to build the infrastructure and serve as delivery partner onsite for Leeming Biogas in North Yorkshire, which will shortly convert food waste into gas for the national grid.

What about building homes on stilts where floods may still threaten? Alexander confesses that’s a technical question beyond him but observes: “Many more ways exist now to make a site workable that wasn’t before. Society doesn’t do itself favours, he adds, by covering so much greenery with tarmac and reducing the run-off area for water.

Fittingly chastised, we finally ask about the proposals to marshal forces and reduce the fragmentation which has bedevilled organisations in construction for so long in the region. Alexander says: “Promoting the interests of the regional contractor and the SME in particular is something new for the Northern Counties Builders’ Federation.

“But we believe that, from the economy’s point of view, these companies are essential to our industry, and the means of attracting more people into the industry, thereby promoting the interests of both the regional economy and the regional and local contractor. That way we can also further our aims for training.

“So we’re getting together with other representative bodies of construction to raise a more united regional voice on behalf of the SME in the widest contruction sense, and to say to national and local government, ‘this is the sort of company you want to be working with.

You’ll get the reliability, the training, and investment in the local economy from these contractors. It isn’t all about bigger being better. It’s about a united front. Watch this space.”